New guidelines on forest land clearance issued

The new guidelines on forest clearance will go into effect after the Forest Ministry fixes the rates for different ecosystems

May 18, 2017-

The government has issued new guidelines on forest land clearance making it easier for developers of large infrastructure projects to acquire wooded areas at their proposed construction sites.

The Cabinet’s social committee on Wednesday approved the Forest Clearance Guidelines presented by the Forest Ministry which offers two options to acquire forest land for development projects. A developer can acquire forest land by buying an equivalent area of forest land in a similar ecosystem elsewhere and creating a similar forest on it and handing it over to the government. Alternately, a developer can acquire wooded areas by paying a fee determined by the Forest Ministry. The payment made by the developer will be used to create a similar forest.

The new guidelines on forest clearance, according to the Prime Minister’s Office (PMO), will go into effect after the Forest Ministry fixes the rates for different ecosystems. “Once the ministry prepares an action plan and determines the rates for different types of land, the project developer can acquire forest land under the new

guidelines,” said Kedar Bahadur Adhikari, secretary at the PMO.

The rule will make life easier for infrastructure project developers including the developers of the 900 MW Upper Karnali and 900 MW Arun-3 hydropower projects who have been hamstrung by forest land clearance hassles. Earlier, the ministry had asked the developers to buy an equivalent area of forest land in a similar ecosystem, create a similar forest and hand it over to the government to acquire the forest land needed for their projects.

The two Indian developers complained that there was no such provision in the project development agreement (PDA) they signed with Investment Board

Nepal (IBN). Both developers have to complete financial closure of their projects by September 2017, and without getting forest clearance, probable lenders will not agree to finance their schemes.

The developer of the Arun-3 Hydropower Project has even claimed compensation from the government under the ‘change in law’ provision in the PDA for its failure to provide the forest land required to develop the scheme. The project needs to lease 125 hectares of forest land to build an access road and implement the civil works of the hydropower project. As per the laws prevailing at the time the PDA was signed, the project developer has to pay lease fees to the government and plant double the number of trees that are cut down on the leased land.

After the Forest Ministry asked the developer to buy an equivalent amount of land and create a forest on it, the developer refused to do so. Instead of complying with the ministry’s demand, the Indian developer dispatched a letter to IBN seeking compensation by invoking the ‘change in law’ clause in the PDA.